83% of UK organizations have no plan to use AI any time soon, but why?

The majority of UK firms are steering clear of artificial intelligence (AI) despite the hype surrounding the technology, according to figures from the Office for National Statistics (ONS).

As of mid-December 2023, 85% of businesses reported they were not currently using AI, the ONS said, while 83% revealed they had no plans to adopt within the next three months.

Both figures were broadly consistent with those for late September 2023, raising questions about the rate of adoption among UK firms despite significant research suggesting heightened efforts to integrate the technology within operations.

Rodolphe Malaguti, product strategy and transformation consultant at Conga, told ITPro the research points toward a degree of hesitancy among many firms across the country due to the lack of a clear use case for their individual needs.

"Whilst AI is a promising technology, it is by no means a silver bullet," he said. "It is just like any other technology, and, like most technologies, it is not necessarily easy to implement or scale."

The stats might come as a disappointment to the government, which has placed a strong focus on championing the use of AI in the UK over the last year.

In October 2023, science and technology secretary Michelle Donelan announced a new £32 million in funding for businesses wishing to expand their AI initiatives, with another £5 million going to feasibility studies for 100 projects involving small businesses across the UK.

Industry research into generative AI adoption also points toward a growing appetite among enterprises. A study from Gartner in October 2023 revealed that nearly half of businesses were using generative AI either in a pilot scheme or full production, marking a steep increase compared to March.

However, the recent ONS data indicates that British organizations still aren’t convinced. Last September, for example, a survey from the British Chambers of Commerce (BCC) found that around half of British firms have no plans to use AI, with customer-facing companies even less likely to do so.

The main reasons cited were a lack of relevance to their business, along with the cost of investment, reliability, lack of understanding, and risks around scams or privacy.

Meanwhile, research from the universities of Leeds, Sussex, and Cambridge found that only a third of UK businesses have invested in AI-enabled technologies like industrial robots, chat bots, smart assistants, and cloud computing over the past five years.

Small business AI investment hampered by same old issues

Large businesses are investing heavily in AI, according to KPMG research, with around seven-in-ten UK CEOs stating the technology is a top priority. However, it’s smaller businesses that are showing the most reluctance. 

This reflects traditional technology adoption trends among small businesses, who have typically been unable to invest and capitalize on emerging technologies due to budgetary constraints and a lack of relevant skills, according to Dr Lee Eccleshare, head of research at AMPLYFI.

"While 85% of all businesses say they don’t use AI, that number falls to 54% for firms with over 250 employees," Dr Eccleshare told ITPro.

"This suggests that larger companies benefit from greater resources and AI literacy to identify promising applications. Smaller businesses likely struggle not because they doubt AI’s potential, but because they lack specialized skills to spot clear use cases relevant to their operations."

Melanie Peterson, program director of TrainAI by RWS, believes that greater adoption rates may just be a matter of time, however. With the generative AI ‘boom’ still in a relatively nascent stage, smaller businesses could be biding their time to learn from best practice examples before embarking on a transformation journey.

"Before they can jump in with both feet, companies must first take time to assess potential opportunities for AI to optimize efficiency and fuel business growth, determine what human, data, technology, and budgetary resources they have available to dedicate to AI initiatives, and define a clear AI strategy behind which their organization can align," she said.

AI skills a big hurdle for many firms

Jeff Watkins, chief product and technology officer at xDesign, specifically highlighted skills shortages as a key hurdle to adoption among many businesses.

Research from Salesforce in June 2023 found that despite an appetite among enterprises to adopt generative AI tools, nearly two-thirds (62%) of workers lacked the necessary skills to use them “accurately and safely”.

"This lack of knowledge and skills means the critical business use cases aren’t being identified," Watkins told ITPro.

"It’s crucial to UK business that we help bridge this knowledge and skills gap, by bringing more AI literacy into organizations so these myths and fears can be dispelled, the use-cases identified and cost-effective implementations put in place to keep us relevant.”